Massey faces shareholder anger over mine disaster

NEW YORK Tue Apr 13, 2010 9:39am EDT

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NEW YORK (Reuters) - Some investor groups are calling for the head of Massey Energy MEE.N to resign, blaming his attitude toward safety for the mine blast that killed 29 at a company mine in West Virginia.

The move came as the last four bodies were removed from the Upper Big Branch mine early on Tuesday, allowing for federal and state inspectors to begin their investigation into the April 5 explosion.

Meanwhile UBS raised its share price target for Massey Energy MEE.N to $67 from $64. The company's shares were up 3 cents at $46.06 in early trading on the New York Stock Exchange.

CtW Investment Group, which owns less than 1 percent of Massey's stock, said it had sent a letter to Massey's board of directors calling on them to immediately seek the resignation of Don Blankenship as chairman and CEO.

The letter called the disaster at the Upper Big Branch mine a "tragic consequence of the board's failure to challenge" Blankenship's "confrontational approach to regulatory compliance."

Last month, CtW had written the Massey board arguing that its failure to exercise sufficient oversight over Blankenship exposes "Massey and its shareholders to unnecessary legal, regulatory and reputational risks."

Massey, which had been cited for safety violations at the mine, says its record is on a par with the industry average.

Separately New York State Comptroller Thomas DiNapoli also called for Blankenship to resign immediately.

"Massey's cavalier attitude toward risk and callous disregard for the safety of its employees has exacted a horrible cost on dozens of hard-working miners and their loved ones," DiNapoli said in a statement. "This tragedy was a failure both of risk management and effective board oversight. Blankenship must step down and make room for more responsible leadership at Massey."

DiNapoli is the sole trustee of the $129.4 billion New York State Common Retirement Fund which holds 303,550 shares of Massey stock, worth about $14.1 million. The CtW Investment Group works with pension funds sponsored by unions affiliated with Change to Win, a coalition of unions.

Massey had no immediate comment on the investors' comments.

In a press release, the company said the last four bodies from the blast at Upper Big Branch had been removed from the mine. It said its focus now was on the investigation and it would work with state and federal authorities to determine the cause of the explosion.

(Reporting by Steve James, editing by Dave Zimmerman)

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